Circle to Issue Its Stablecoin USDC on Celo; 5 Questions After Spot Bitcoin ETF Approvals

What are you most excited about for the cello ecosystem payments? What emerging market do you think is ripe for the next round of crypto adoption, Africa? Are we in a crypt bull market yet? No. What do you think was an underrated Blockchain development last year? Real assets? And what do you think will be the next big Blockchain trend mobile? That was fellow co-founder Renee Reinberg who has a big announcement this morning. Stick around for that interview in just a few minutes. Welcome to first mover on coin desk. I'm Jen Sasi on this show. We bring you all the top news headlines and interviews with industry heavy hitters. So hang on to your seats. We're going for a wild ride. Let's take a look at what's happening in the news this morning. The largest Cryptocurrency change in the world appears to be making some changes. According to the Financial Times. Finance now allows larger traders to keep their assets at independent banks. Previously, they had to hold their assets on the exchange or at its custodial partner. Now they can reportedly use some crypto friendly institutions. The move comes after Bin's regulatory dispute in the US landing a $4.3 billion fine last year. Tap root wizards debut sale of Bitcoin inscriptions. Quantum cats got off to a rocky start. The much anticipated sale was marred by technical issues on Monday resulting in a delay and leaving many users frustrated quantum cats posted on X that they are postponing the mint to Thursday and retweeted a post that stated despite the mint website not functioning well, almost 1000 cats were minted successfully. And traders from decentralized prediction platform poly market have a new US presidential prediction. 55% expect former President Donald Trump to win the 2024 election. Again, current President Joe Biden clocked in with the odds of 38% and Republican Nikki Haley garnered about 1% since its debut in 2020 poly market has been one of the preferred destinations for traders looking to bet on binary events. However, us residents are not allowed to trade on it. US. DC stablecoin issuer circle is gearing up to launch the digital dollar natively on Blockchain cello. Joining us now to discuss is Cello, co-founder and Cello Foundation, President Renee Reinberg, Renee, welcome to the show. Hey, it's great to be here a lot going on in the news this morning. Markets are up. I gotta ask you any initial reactions to what's going on this morning. Yeah, look, it's as busy as ever. Um And I think there's uh I've been feeling a lot of excitement uh going into 2024. And yeah, the news cycle shows that I think um also interest from the broader public is coming back to, to crypto um prediction markets, I think can be really a key building block also um as it comes to building new applications. Um So yeah, it's, it's great to see that we're no longer just talking about token prices. But uh the attention really is shifting to applications and how um they can be useful for, for the broader public. I want to talk about the circle news in just a moment. But for the uninitiated who are just tuning into the show lay the foundation for us uh just to introduce Stello and talk a little bit about your mission. Yes. So Cello is a Blockchain that was really started with a focus on mobile. You know, we have most of the world accessing internet on mobile phones. And let's be honest, like the crypto tools or the the products we use are largely built for desktop and so big focus by the core team and then the ecosystem that's built around c to bring all this and make it work on on mobile phones. The latest example of that is Opera mini pay, which is a product that's built directly into Opera's mini browser and has over 100 million users in Africa and really allows anyone anywhere in Africa to very easily access web three in this new digital economy. But with respect to co there, there are a few features that I think really make co the best chain for, for payments, not just mobile payments, but payments generally. So we have very low fees. So 10th of a percent uh fast settlement. So five second block times and um a really cool feature which is the ability to pay for gas in uh stable coins. So once uh circle launches UCC, um and the launching proposal passes, it will be possible uh for fees to be paid in UCC, which is really neat if I, for example, send you uh five U DC and you don't have any cell on your wallet or, you know, the would be if you can still do something with that uh with that $5 and you can send it on to a friend or use it directly because you're able to use some of that uh to pay for fees. Um So that's really from a UX perspective. Um It's really a game changer because it allows people much more easily to on board to uh to web three. Uh So, yeah, those are some of the key features that builders really like. Um And I think a second sort of uh big sort of factor there is this focus that I mentioned on, on real world assets. And that started with um some of the early c of work around tokenizing uh real world assets and the climate and the refi space. So think tokenize carbon credits or nature assets. Um Of course, Stablecoins themselves are probably the real world assets in terms of taking fiat and bringing it on chain. Um But we've also seen really cool use cases of um for example, other local currencies, whether that's the Brazilian real or the West African franc, which is a currency used in West Africa. And those are were launched by, by the Mentor Protocol. Uh and uh really help, for example, in the context of uh powering local credit, right? And because most people in local markets, whether it's business or individuals, um they want to take out loans and local currency um versus dollars, which, you know, dollars obviously are still the predominant um Stablecoin on chain. But I think it's that interplay between institutional grade stablecoins like circles us DC and then some of those local currencies that I think will bring an accelerated option of um of web three, Renee, we're hearing a lot about real world assets that's going to be the major trend leading into this year is what what many industry onlookers are saying. But I saw a funny tweet the other day, I brought it up on the show for one of our other guests and the tweet said are Real World assets in the room with us right now. I think alluding to the fact that like, what are these Real World assets? What does it mean? What value does it bring to users. Can you break that down for me? Yeah, it's kind of like a funny term. I um you know, it's uh it's interesting, I mean, of course, you know, I mean, the mental model that I have is like basically anything that's an asset in the real world that you can bring on Shane to have it be accessible by, by, you know, a user on Shane or a smart contract that's ultimately a rebuild asset, right? So Stablecoins themselves, UCC uh is a rebuild asset. And you know, stablecoins, I think as a kind of total market cap of 100 and 30 100 and $40 billion clearly are um sort of, you know, so far the early uh success story of, of Real World as and, and I think web three generally and I think many predict 2024 to be the year for stablecoins, right? To see more of that real world adoption. Um But we've on sell, we've seen some really interesting applications in other areas of real world assets, whether that's in the refis space with on chain carbon credits or nature assets. As I mentioned, projects like flow carbon toucan fallow one earth um or uh in the in the credit space, right? So there is a community led effort called the credit collective ono and they've really assembled probably the brain trust around uh credit, whether that's uh B to B credit or um uh or consumer credit even. And a lot of the kind of credit stack, whether that's Z finance or centrifuge JIA Entangled um are all kind of working on cello and are collaborating to bring sort of the right set of solutions uh to market. And I think that's uh that's interesting because for that you need stable coins, but then you also, you get basically these, you know, tokenized credits uh as a sort of, you know, another example of, of a real world asset. And, and ultimately long term, if you know, if we imagine the world moving towards an on chain economy, then we would imagine all our real world assets to be on chain. And so I think real world assets right now is is kind of a term for us to mentally catch up that. Oh yeah, we can use stuff from the real world on chain. It's not just Bitcoin, you know, which is there is no Real World Bitcoin that we can bring on Shain, right? It's a, it's a, it's a uh it's a web free native asset, right? But these are assets that exist in the real world, but we make them accessible in this new digital economy. And I think in a couple of years, probably no one's going to use that term. Uh Right now, I think it helps us build that bridge that. Oh yeah, these are things that we can, we can use on chain. Let's talk a little bit more about this US DC news now. So US DC is going to be an official gas currency for the cow community. You mentioned that just a few minutes ago, uh talk to us about the difference for a user, right? So right now if I interact on a Blockchain, usually the gas fee is supposed to be paid with the native token, the native currency of the Blockchain. Uh In, in this example, us DC is the uh token that is used, which is pretty innovative. How did this partnership come to be? Yeah, I think this is really one of the key differentiators and I think that um it's going to unleash a bunch of new use cases. I, I imagine um for, you know, developers as they pick chains, uh sort of this gas abstraction as, as we refer to it is, is really powerful. Um I uh yeah, in terms of the partnership look, I mean, obviously we've uh we've known the circle team for for a long time. Um I think especially with this year's. Um you know, I mean, um maybe the Bitcoin ETF feels like it's a different story over there but, you know, you have institutions like Blackrock really now coming into the space, right? And they're likely not going to stop at, you know, ETF S and, and so I think for us, I think especially as we look to connect some of those institutional partners or capital to um those solutions on the ground, whether that's micro credit or, or climate assets, right? Having sort of this institutional grade us DC A stablecoin that is, that is trusted and already adopted by the institutions, I think is really powerful. So I think um for us, um well, first off, I mean, obviously it's a, it's always um you know, I mean, it's, it's I think great validation for co so we're very happy. I think it's a sign of that. Ok. You know, co is a chain that um circle trust and you know, is, is excited about. So that's, that's awesome. But I do think um there's, there's a bunch of pent up demands um around uh you know, more institutional capital coming and connecting to, to these really interesting use cases that are forming. Um So yeah, personally, very excited, I think gas abstraction uh even though fees are very low, right? It's often not the matter of k do you uh do you have enough money to pay for gas? But do you actually have the token that's required to pay for gas on other shades? And I run into this all the time when I uh play with stuff on other chains. And I think this is really powerful because on cello, someone sends you, you know, $5 now and, and you can just start and have fun and explore all the the great applications that exist. Now, you mentioned use cases, you mentioned a few different jurisdictions, uh Africa and Brazil. What area of the world are you focusing on right now? Where are you seeing the most promise for crypto innovation and crypto adoption? Yeah, we're, we're seeing a lot of pool from Africa. Um and this is not, you know, obviously Africa is a continent, has many different markets and many different sort of local, uh you know, needs and use cases and inflation in some markets and, and other, you know, things in other, in other markets. But across the continent, um where we've seen just tremendous interest and this is less about uh you know, sort of speculation and crypto assets. This is really around stable coins as a way to uh build wealth uh to, you know, have sort of a way to protect against inflation in some of these markets, right? Where if you go to Nigeria and inflation has really been skyrocketing and, you know, it's, it's wiping out people's uh already small savings, right? So having the ability to hold dollars earn in dollars um is, is really powerful and, you know, obviously peer to peer payments, cross border payments, the, you know, where uh from the, from the early days of seller, we've been working closely with a bunch of organizations that are in sort of the cash transfer um business and, you know, I think their digital payments in general, but then I think stablecoins can, can bring a lot of benefits. Uh so definitely across Africa, um probably with Nigeria, Kenya, sort of leading markets. Um lots of, lots of pool for, for this, you know, general new technology, but then in particular stablecoins, um Latin America and Southeast Asia equally, I think there's, um I think there's kind of this, um, you know, call it mobile defi um appetite, right? It's basically people giving people a way to, you know, now have a wallet build wealth, but then also access this new digital economy, right? Do basic things, take out loans, um maybe do work online, get, get paid in a stable coin, be able to cash that out locally without, you know, really that being kind of costly. Um So, you know, as an ecosystem, there's been a big focus on, on also enabling those bridges, right? So if a user wants to cash in from mobile money or cash out to their bank account, right? That should be seamless, that shouldn't take time, that shouldn't uh cost, uh you know, a lot of fees ideally be free, right? And I think that's when you, when you start removing some of those barriers, um then you're really starting people trusting this technology and um and engaging much more with that. And I think that's a thing that I mean, I love to take credit for it, but it's really an ecosystem effort where, you know, it requires hundreds of different companies and different markets. There's local companies that have the license to do the on and off ramping, right? And that all come together and because everything is composable in web three, it's, it's really powerful because we can see the different pieces um come together. And I think circle today uh was, was the announcement. Um Already, I've been getting some announcement, I think just went up a few minutes ago and I've already been getting messages from some teams that have been evading that launch and are excited to integrate. So, um yeah, I think it's, you know, each of these things is kind of just a puzzle piece that makes it easier for, for teams to uh to build and accelerate what they're, what they're doing. OK. And Renee we got to wrap it up. But I have to ask you the last time that uh coin desk reported on cello was looking to migrate to become a layer two network, join the layer two race any progress there? Yeah, we, we're deep in it. No, it's, it's actually way more complex than we thought it would be getting into it. And it's mostly because there's really a bunch of really strong stacks. And so we've been in close touch with the teams that optimism, arbitra ZK sync and polygon and really, you know, not taking this decision lightly but really trying to understand. OK, for cello specifically, for the things that we care about what is the best step for us to use. And obviously our solution is, is a bit unique because we're an existing chain. And so we're looking to have a decentralized sequencer from the outset using our validators and using I and D for data availability. A lot of this is, is really at the frontier of like what's, what's being, what's being researched and still built in some cases and so very close dialogue with all of these teams. And I think we, we're getting close to a decision on this now, which is, which is exciting because ultimately, yeah, it's something that we want to do as fast as possible while still making sure it's the right decision in the long run. Um So, yeah, it's um it's uh it's an exciting time because I think a lot of um you know, I think back 56 years ago when we started working on co seeing how far um it's, it's, it's really exciting to see the theorem scaling story really play out. And uh yeah, personally, I'm, I'm very bullish on sort of the theorem, the Broad Theorem ecosystem uh living up to a lot of the early promises of what it can bring to the world. And uh and for co to be a part of that and, you know, bring a lot of the users and especially on mobile uh to, to Ethereum and to that mission, Renee, thanks so much for joining the show this morning. Thank you so much. That was cello, co-founder and cello Foundation President Renee Reins beg. Today's chart of the day is all about Bitcoin and luxury items. Let's take a look. The chart of the day is presented by crypto.com, the leading crypto platform trusted by over 80 million users worldwide. Bitcoin's price correlation with luxury watches has been broken. Both Bitcoin and luxury goods are scarce and prices between the largest Cryptocurrency by market cap and those fancy time pieces were positively correlated before spot ETF optimism took off prices for both rose during the COVID years as central banks and government governments dumped easy cheap money into the economy. Data from watch charts.com shows that pricing peak came at the end of the bull market in 2021 with many traders cashing out at the peak and moving on to shiny new assets for most of 2023. Though prices for luxury watches and the coin desk 20 an index of the largest digital app sets moved in parallel but the two diverged in the third quarter and fourth quarter. Head of research at VDX Greta Yuan pointed to the institutional interest that Bitcoin has now. Thanks to that ETF which watches don't quite have as a reason for the price bump. Ok. Let's dive deeper into ETF S. This spot. Bitcoin ETF update is presented by Grayscale, the world's largest crypto asset manager. It's time now for open forum. This is a brand new segment where you send us questions and we find you answers this is all about making the space, making the industry more accessible because you know what things don't have to be that daunting. All right, let's go. It's been 20 days since spot Bitcoin ETF S were approved in the United States and 21 days since they started trading. We asked you on X but was still unclear about the spot Bitcoin ETF S and found out that there are still a lot of things that are unclear about these products. So let's try and clear the waters. The first question is from crypto signals you, it says, how exactly does a Bitcoin ETF differ from holding physical Bitcoin? Ok. Let's get into it. If you buy the ETF, you don't actually ever own any physical Bitcoin. What you own is a share of font that delivers you the price performance of Bitcoin. So if the price goes up, the price of your share will go up. But if the price of Bitcoin goes down, the price of your share will go down. This means that you get to participate in the price action, but you don't actually have any Bitcoin. So if you want to pay your friend for babysitting your dog with some Bitcoin, you can't actually do that because you don't have any, you just have some shares in a fund. On the other hand, when you buy Bitcoin on chain and transfer it to a cold wallet, for example, if you buy Bitcoin at an exchange like Coinbase and then you move that Bitcoin to your own wallet, you own your Bitcoin and you can act as your own thing. Of course, if the price goes up, you'll be pretty happy, I think. And if the price goes down, you won't. But that friend who's babysitting your dog will be able to get paid if you choose to pay them with Bitcoin. All right. Question number two comes from crypto swats YT. They asked how many ETF S of the 11 will actually survive and take most of the buying share. Cynthia Murphy from ETF Think tank says that some have framed this as a big dog versus crypto native battle. This is because firms like Black, which is the biggest asset manager in the world and firms like Gray scale which is a crypto native asset manager have both joined the ETF race. Cynthia told us that it's all going to come down to investor preference at the end of the day. So over time, she added that the performance and differentiation could matter, but she noted something pretty interesting. There are 10 physical gold ETF S in the United States worth 100 and $10 billion. So if we use that as an anchor, all 11 could survive right now though Black Rock and Fidelity are leading the asset gathering race. Let's take a look at question number three. This comes from BT C like Bitcoin. They asked how soon after somebody invests in a Bitcoin ETF, do the funds buy the spot Bitcoin? And did any of the ETF providers accumulate Bitcoin prior to the ETF S being tradable, Cynthia Murphy told us that funds usually purchase the Bitcoin within 24 hours and yes, many of the providers had private funds or ETF S in other geographies that already owned a significant amount of Bitcoin. Next question comes from Bitcoin or Donald. This is not Donald Trump's official account. They asked how many Bitcoin ETF shares are equivalent to a whole Bitcoin. Now, this depends on the fund. They each come in at different price points. So you'll have to check the price of the funds that you want to buy into. But a simple formula for reference would be to take the price of Bitcoin and divide it by the price of the ETF share that you want to buy. So for example, in very simple math, if a share of an ETF cost $5 and the price of Bitcoin was $100 I don't know what world we're living in now, but let's just go with it. 20 shares would be equal to one whole Bitcoin. And lastly, Bay Bars Pargo asked, would you be able to explore how Bitcoin ETF S might shake up the market dynamics, particularly influencing the fluctuation patterns and fluidity of Bitcoin prices. Cynthia said that ETF S often get a bad rep for moving markets when in reality, they're a great price discovery instrument because they're so liquid. She says the only likely impact is increased demand due to easy regulated and lower cost access. More demand in the face of inelastic supply could be supportive of prices over time. So what does this mean? Ok, I'm gonna try and break it down for you. Since there's a fixed supply of Bitcoin, there will will never be more than 21 million coins. That means we can expect the price to increase over time if demand increases, which a lot of people think it will. Cynthia also noted that most market participants are also suggesting that increased liquidity could smooth out some of the price volatility we've seen with Bitcoin liquidity refers to the ease in which an asset can be bought or sold. So in this case, the asset is Bitcoin. Higher liquidity usually means that there are more buyers and sellers in the market making it easier to execute trades without causing big price movements. So the idea here is that if there is increased liquidity in the market, it may make the market more stable and less prone to sharp and sudden price changes. OK. That was our very first open forum. Just stick with us. It's gonna get better over time. A big thank you to head of research and content at ETF Think Tank Cynthia Murphy for assisting us with the answers to those questions. So now that we've answered some of your questions about the spot. Bitcoin ETF, how would you choose to invest in Bitcoin? Today? We asked folks on X and 67% of you still said self custody, that means holding your own Bitcoin in a cold wallet while only 13% said that they would buy into an ETF, what I take away from this all is that there are options out there for everyone that matches each person's different risk appetite. People who are comfortable with crypto and holding their own coins and being their own bank can opt for self custody while folks who want the reassurance of participating in a product that is regulated and with asset managers who maybe have a little bit more longevity might opt for an ETF my takeaway point here is because one exists, it doesn't discredit the other. That is a wrap for first mover today. Thank you so much for watching. Thank you so much for joining us every day and thank you to our guest, Renee Reinberg. As a note, we do sometimes edit interviews on this show for consistency and clarity. We are trying to make this show the best show it can possibly be. So if you have any feedback for me, DM Me on Twitter. And if it's serious feedback, we will take it into account. We'll see you tomorrow. Thanks for watching, first mover.